[44 NJSuper Page 511] This is an action by the executor of the estate of James G. Appelget, deceased, to foreclose two certain real estate mortgages, one executed in 1946 for $19,000, upon which $17,500 and interest is asserted to be due, the other in 1954 for $40,000, on which $38,800 and interest is claimed due. There are joined in the complaint counts on several notes and loans on which defendants are said to be obligated to the estate for several thousand dollars and one on a guaranty by the defendant Vincent E. Van Hise of a note to the decedent made by his brother, Vernon Van Hise, and his wife, for $1,800, on which $981.96 plus interest is said to be due the estate. The principal matter in dispute is the continued subsistence of the 1946 mortgage debt. Defendants contend it was discharged in the transaction culminating in the making of the 1954 mortgage by inclusion of any balance

In the answer filed by defendants, while liability on the $40,000 mortgage is admitted, interest is disputed on the ground that the decedent excused payment of installments of principal "because they would be taken care of when he was gone." The answer includes a counterclaim asserting that over a period of years from 1941 until the decedent's death in 1955 the defendant Vincent E. Van Hise rendered extensive farming services on the decedent's farm and cleared woodland thereon for and at the request of the decedent, for which the estate owes him the reasonable value thereof, stated to be $17,120, and interest. A second count in the counterclaim alleges a verbal agreement between Vincent Van Hise and the decedent whereby the former was to work decedent's farm and have the proceeds of the 1956 crops, less taxes and insurance. It is contended plaintiff prevented the harvesting of the crops by Van Hise and judgment is sought for their value.

A general exploration of the background of the association of James G. Appelget, the decedent, with the defendant Vincent E. Van Hise will illuminate the conclusions of the court both on the facts and the law. Appelget was 69 at his death. Van Hise appears to be in his forties. Their association in a business sense began in 1941 when they entered into a share-cropping agreement whereby Van Hise raised potatoes on Appelget's 46-acre farm on the outskirts of Hightstown. This arrangement continued until 1951. In the interim the acreage devoted to potatoes decreased somewhat and Van Hise soon began, in addition to the potatoes, to raise various other crops on Appelget's land for the latter's benefit, using his own machinery and providing additional labor at his own cost and expense. There is no contention by defendants that these services were ever the subject of any express agreement or understanding as to compensation, as in the matter of the potatoes.

All during this period Van Hise's principal occupation was the operation of a dairy and grain farm of his own,

first in Cranbury, and, since 1944, in Clarksburg, Allentown. His present farm, which is encumbered with the mortgages involved in this litigation, is 210 acres in area. He keeps about 40 cows, has one steady helper and in seasonal necessity hires additional hands. In acquiring this farm in 1944 he was financed by a bank mortgage to the extent of $17,500. The $19,000 mortgage to Appelget in 1946 was for the principal purpose of refinancing the bank mortgage. Defendants offered proof through Van Hise's father that it was Appelget's idea to do this and that it was deemed beneficial to Van Hise for Appelget to carry the mortgage rather than the bank.

Appelget's will, under which plaintiff, his brother, is serving as executor, was made February 14, 1941. It left a life interest in the residue of the estate to his wife, remainder to his six brothers and sisters. His wife died several years later. Thenceforward his association with Van Hise ripened into a close friendship, a relationship almost paternal. He was known to Van Hise as "Uncle Jim." The record is replete with evidence of his fond regard for the younger man. He expressed this feeling to a number of others over the years. It was reciprocated. In 1946 Van Hise named his only son after Appelget. While Van Hise unquestionably rendered valuable services to the decedent, so did the latter for Van Hise, within his more limited capacity. He helped to remodel Van Hise's farmhouse and to plan the foundation for a new feed room, he mixed cement for a new silo, raised calves for Van Hise on his own farm, visited him frequently and advised him generally. Of most significance in a material sense, he stood ready at all times to finance Van Hise, and, as will appear, he did so frequently and generously, even to the extent of borrowing on occasion for the purpose. In his last illness Van Hise attended him like a son. I am convinced Appelget intended ultimately to relieve Van Hise of the mounting burden of indebtedness which his fondness for the man had permitted to grow beyond Van Hise's capacity to carry it. But he never actually

did, nor bound himself legally to do so, so far as the evidence in the case permits me to find.

I proceed to the specific issues to be determined.

1. As to Payment of the 1946 Mortgage

The question to be determined here is whether, when decedent advanced fresh moneys to or on behalf of Van Hise in or about October 1953 and took a $40,000 note and chattel mortgage from him, followed by a $40,000 bond and real estate mortgage as additional security in January 1954, the debt on the $19,000 1946 mortgage was discharged in the course of the transaction. Plaintiff concedes that $1,500 was paid on the 1946 mortgage prior to the 1953 refinancing, but nothing then or since.

Both the chattel mortgage transaction in October 1953 and the real estate mortgage in January 1954 were handled by attorney Robert E. Dietz, since deceased, reputed to have been a careful and experienced practitioner in such matters. The evidence is that he was acting for both parties and that his bills for services were paid by Van Hise. A "Mortgage Settlement Statement" dated October 26, 1953, prepared by Dietz and signed by the parties, shows as debits against a credit of $40,000:

"Debits

Amount due James Appelget on notes

and interest thereon $18,081.88

Check to Robert E. Dietz for the

account of Vincent Van Hise 21,918.12

$40,000.00"

A "Chattel Mortgage Settlement Statement" prepared and dated the same day shows a breakdown of the $21,918.12 aforementioned to cash disbursed by Robert E. Dietz, $1,805.03 to the Van Hises, and the remainder in various amounts to nine creditors of Van Hise, some of whom held recorded liens on Van Hise chattels and farm equipment, which were forthwith discharged and cancelled.

The crucial question is obviously the identity of the $18,081.88 component of the new $40,000 mortgage debt referred to above. Was this, as apparently argued by defendants, the principal balance on the 1946 mortgage, or rather, as contended by plaintiff, did it consist of interest thereon and subsequently created obligations?

It is noteworthy that the earlier bond and mortgage were never delivered up for cancellation. Defendants explain this on the basis that Appelget neglected to bring the instruments in at the October 1953 closing and promised to do so later. Dietz' then secretary testified in their behalf that Dietz had told her that the 1946 mortgage was to be cancelled. Van Hise was prevented from testifying to any phase of the transaction by sedulous invocation by plaintiff of the bar of the statute against testimony by a party to any transaction with a decedent represented in the action. N.J.S. 2 A:81-2. Defendants emphasize that a pencilled memorandum prepared in connection with the transaction by Dietz recites: "To discharge existing liens." But this more ...

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